Section 17 of the BC Residential Tenancy Act provides that a landlord may require a tenant to pay a security deposit as a condition of entering into a tenancy agreement or as a term of a tenancy agreement. A landlord may only collect a security deposit at the time the tenancy agreement is entered into. Further, the deposit may not be more than one-half of one month’s rent. Only one security deposit can be collected for each residential unit. Landlords may collect extra deposits for such things as keys, access cards, and garage door openers. In addition, landlords have the right to decide whether to allow pets and are permitted to collect an additional damage deposit to cover damage that might be caused by pets, but these pet damage deposits may not be more than one-half of one month’s rent. A landlord must pay interest (compounded annually) on both the security deposit and the pet damage deposit. The Act provides a detailed method to determine the interest rate to be charged.
Section 38 of the Act requires the landlord to pay the deposit and the interest accrued on it to the tenant within 15 days after the termination of the tenancy. Section 38(6) provides that if a landlord refuses to return a deposit to a tenant, and does not apply for Dispute Resolution, a landlord must repay the tenant double the security deposit, pet deposit, or both, as applicable. The tenant may make an application to the Residential Tenancy Branch through the Direct Request process, which will allow an arbitrator to issue a monetary award against the landlord without holding an oral hearing.
According to section 93, a security deposit and the obligations of the landlord run with the land; therefore, a buyer, when buying rented property, must make sure to collect any security deposit and accrued interest from the seller, because the buyer will have to pay these amounts out to the tenants as their tenancies end.
Section 23 of the Act requires that at the start of a tenancy, the landlord and tenant together must inspect the condition of the rental unit. This must take place on either the day the tenant is entitled to possession of the rental unit or on another mutually agreed day. The landlord must offer the tenant at least two opportunities, as prescribed, for the inspection and must complete a condition inspection report, to be signed by both the landlord and tenant. The landlord must give the tenant a copy of that report in accordance with the Regulation. Section 24 provides that a tenant’s failure to participate extinguishes the tenant’s right to the return of a security or pet damage deposit, and a landlord’s failure to participate or to comply with the section extinguishes the landlord’s right to claim against either a security deposit or pet damage deposit.
